Gambling revenue
Casino growth leaves a bitter aftertaste

This content was published on September 9, 2012 11:00 AMSep 9, 2012 - 11:00

Gambling addiction can also be caused by games played outside of casinos

(Ex-press)

Switzerland has one of the world’s highest densities of casinos. Soon two more will be added to the 19 others that already exist, bringing in even more funds to the public coffers. But society foots the bill for gambling addiction.

As a nation, the Swiss are very partial to a flutter: in 2011, lotteries, betting and gambling earned the gaming industry over SFr1.7 billion ($1.78 billion).

Gaming represents a highly lucrative source of income. Last year, taxes on casinos yielded SFr360 million francs to the federal coffers, while SFr60 million were turned over to the cantons. The gross profit from gaming (the difference between bets and wins) was SFr824 million.

Swisslos and Loterie Romande, the two non-profit associations that run lotteries and some gambling in Switzerland, paid out Sfr557 million to the cantons as well as social, cultural, research and sports projects.

But there is the other side of the coin – when gambling becomes more than a simple pastime. According to the 2007 Swiss Health Survey, 85,000 people have a problem with gambling and 35,000 can be considered compulsive gamblers.

Compulsive gambling can lead to mental and physical problems, stress at home often ending in divorce, absenteeism, indebtedness and suicidal tendencies. According to research published in 2012 by Neuchâtel University’s Institute of Economic Research, the social cost of compulsive gambling is estimated to between SFr545 million and SFr658 million.

Prevention rather than prohibition

Given these figures, is legalised gambling economic madness?

Prohibition would probably not solve the problem, as suggested by experience with drug use. And the issue is not on the government agenda. In fact, two new casinos are due to open their doors in Neuchâtel and Zurich.

Just as with other activities where there are potentially dangerous behaviours, “we need to try to protect the populations at risk as best we can. In Switzerland there is a lot of gambling, governments make a lot of money, so we have to take responsibility”, says Fréderic Richter, coordinator of the intercantonal programme to combat gambling addiction created in 2007 by the six cantons in western Switzerland.

Federal gambling legislation, which came into force in 2000, prescribes a “social component”. This means that casino managers are required to adopt measures to “prevent or discourage socially harmful consequences of gambling”.

They must bar people who are heavily indebted or who make disproportionately risky bets. At the end of 2011, 32,410 people were banned from entering casinos.

“We check the identity of all customers, to see if any of them are barred. And employees get several days’ training so they can recognise potentially compulsive gamblers at an early stage”, Marc Friedrich, director of the Swiss Casino Federation, told swissinfo.ch.

Room for improvement

“The collaboration with the casinos is good. People looking after the social component in the gaming establishments have regular contact with us,” notes Nicolas Bonvin, president of the Ticino group for the prevention of gambling addiction.

According to Bonvin, the barring provisions, which apply to all Swiss casinos, have proved effective.

For Richter though, this collaboration could be improved. “Every year less than ten people referred directly from the casinos turn up in the specialised centres in western Switzerland,” he added.

This is a small number, considering that those banned from the gaming tables and slot machines number about 3,000 a year.

“With the law as it stands, checking on people barred from gaming establishments is not obligatory,” says Friedrich. “It depends on the casino’s own policies. The approach in Ticino is good and should be followed.”

“Every gaming establishment works with a specialised centre. However, people barred from gambling cannot be forced to go to these centres, and too few go.”

Not just casinos

The casinos are not the only players in this game. According to the Swiss Health Survey, 80 per cent of those suffering from gambling addiction problems don’t restrict themselves to casinos.

Along with online casinos, which are completely uncontrolled (see sidebar), there are lotteries, scratch-and-win cards, sports betting and other temptations.

The two associations – Swisslos and Loterie Romande – have an important role in this case, even if, as Bonvin notes, “there are games that lead more to addiction than others. The traditional lottery with numbers, for example, is less of a danger, because the result is not immediate.”

A percentage of 0.5 per cent (about SFr4.5 million per year) is deducted from their revenues and used to finance programmes against gambling addiction. The two associations have also put programmes in place to raise awareness among newsagents and café owners who have electronic scratch-and-win machines installed on their premises.

For the prevention experts, there is room for improvement though.

“There is no ban on acquiring lottery products for under-18s, there is dubious advertising – like the kind that says ‘we make the biggest number of millionaires in Switzerland’ – which casinos are prohibited from using, and there are few checks on the quality of programmes to fight addiction,” notes psychiatrist Tazio Carlevaro, a specialist in pathological gambling.

Some of these issues could soon be a thing of the past.

By accepting a new constitutional article, Swiss voters took a first step to overhaul gambling legislation. An amendment is being drafted at the moment and in the near future, lotteries and betting operations will probably have to do more to counter compulsive gambling.

Online casinos

Federal legislation on gambling and casinos dating from 1998 forbids “the use of electronic and telecommunication networks, particularly the internet, for playing games of chance”.

This ban is almost impossible to enforce, since any internet user can access online casinos or betting sites based in other countries.

There are proposals to change thisprovision. In a 2009 report, the Federal Gaming Board came to the conclusion that “virtual gambling should be liberalised, and apart from such liberalisation, illegal operation of these games should be more effectively curtailed through further measures”.

The government would like to establish a legislative basis that would provide for blocking or limiting illegal online gambling by technical means, on the one hand, and a weakening of prohibition on the other, so that it would be possible to let a small number of concessions for internet gambling to operators based in Switzerland.

Prevention experts are generally in agreement with this change. “As regards gambling activities online, we would prefer regulated availability to the present situation. Without regulation you cannot have effective prevention”, notes Richter.

WEF 2018

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